Arbitration Clause

Now more and more China business partners stipulate in their contract to settle their dispute by international arbitration. China international arbitration attorney draft arbitration clause to facilitate the purpose of their clients. A business contract, lease or other written contract may contain an arbitration clause. By using such a clause, the parties to the contract agree to arbitrate any future disputes. As with any clause, all parties must agree to it's use in the contract before the contract is signed. The following arbitration clause language may be modified to suit the needs of the parties or used "as is" in order to utilize the services of an affiliated United States Arbitration & Mediation office, if arbitration is ever needed.

Arbitration is an out-of-court proceeding in which a neutral third party called an arbitrator hears evidence and then makes a binding decision. Arbitration is the most commonly used method of alternative dispute resolution (ADR), and you'll find an arbitration clause in the fine print of all kinds of contracts these days. Read on to find out whether you should include an arbitration clause in your agreement.

Arbitration can be binding (which means the participants must follow the arbitrator's decision and courts will enforce it) or nonbinding (meaning either party is free to reject the arbitrator's decision and take the dispute to court, as if the arbitration had never taken place). Binding arbitration is more common.

An arbitration clause is a commonly used clause in a contract that requires the parties to resolve their disputes through an arbitration process. Although such a clause may or may not specify that arbitration occur within a specific jurisdiction, it always binds the parties to a type of resolution outside of the courts, and is therefore considered a kind of forum selection clause.

Since the foundation of international arbitration is its consensual nature, the parties to an international contract may – to a considerable extent – design the manner in which the arbitral proceedings are conducted. The first and most important opportunity for the parties to take control of their arbitration is in the drafting of their arbitration clause. As part of this exercise, the parties have substantial (although importantly, not unlimited) freedom in engineering the structure of their arbitration. In drafting the clause, there are a few mandatory requirements that must be met, and a few provisions that must be included. These provisions should be clear and unequivocal.

In addition to these provisions, however, a clause may be ornamented in virtually endless combinations with a cornucopia of provisions covering topics as important as the situs of the arbitration and as esoteric as class action arbitration. A word of caution is in order. There is no such thing as a single “model”, “miracle” or “all purpose” clause appropriate for all occasions. Contact our China international arbitration lawyer to tailor an international arbitration clause for you. A well tailored arbitration clause can make it valid and practical, or a bad clause may lead your rights in vain.